Model Closure and Price Formation Under Switching Grain Market Regimes in South Africa

Ferdinand H. Meyer, Patrick C. Westhoff, Julian C.R. Binfield and Johann Kirsten

No 25432, 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists

Abstract: This paper develops the structure and closure of an econometric regime-switching model within a partial equilibrium framework that has the ability to generate reliable estimates and projections of endogenous variables under market switching regimes. Models used in policy evaluation usually either ignore the possibility of regime switching using just a single method of price determination based on average effects, or incorporate highly stylised components that may not reflect the complexities of a particular market. This paper proposes an approach that the authors believe allows the incorporation of features of regime switching in a multisector commodity level model that capture salient features of the South African market and therefore are able to produce more reliable projections of the evolution of the sector under alternative shocks.

Keywords: Agricultural and Food Policy; Crop Production/Industries (search for similar items in EconPapers)
Pages: 9
Date: 2006
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Citations: View citations in EconPapers (20)

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Journal Article: Model closure and price formation under switching grain market regimes in South Africa (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae06:25432

DOI: 10.22004/ag.econ.25432

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